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QUESTION
Suppose that the risk-free rate is 5% and your portfolio is invested 25% each in x and y, and 50% in z. Given the expected return on this market...
Suppose that the risk-free rate is 5% and your portfolio is invested 25% each in x and y, and 50% in z.
- Given the expected return on this market portfolio is 10%.Find each stock's beta and your portfolio's beta.
- Find each stock's Reward-to-Risk ratio.
- Which stock has highest risk premium? Find the diversification effect on this portfolio.
